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COVID-19 Update | Monday, June 1 (AM)

June 1, 2020


  • Senate Republicans believe the next major COVID-19 relief package is likely to move in the coming weeks. At this point we believe a package is not likely to move until July. Republicans and Democrats alike will be faced with how to help 40M Americans that are currently out of work.
    • Majority Leader McConnell and his Republican colleagues continue to assert that they will not support an extension of the unemployment benefits that Congress passed as part of the CARES Act. They continue to argue that the benefits provide a disincentive to return to work and are proposing other alternatives, including a back to work bonus.
    • Democrats continue to counter this, stating that on average, regular unemployment insurance covers just half of workers’ pay.
  • Lawmakers in Congress that have little in common have made tech a shared target on issues related to antitrust, privacy, and online content. It is possible that the President’s recently signed Executive Order will renew conversations amongst lawmakers related to withdrawing Section 230 protections for tech and, especially, social media companies.
    • The EARN IT Act, led by Sen. Lindsey Graham (R-SC) currently has six Democratic and four Republican cosponsors and Rep. Jan Schakowsky (D-IL), the Chair of the House Energy and Commerce Consumer Protection Subcommittee, is expected to introduce her own Section 230-related bill. Other members are drafting legislation around the issue also.
  • Democratic Congressional staff signaled optimism that some money for broadband will be included in a future COVID-19 relief package. A spokesperson for Sen. Ed Markey (D-MA) claimed that there is bipartisan support for spending more money on E-Rate, Lifeline, or Rural Healthcare initiatives, for example. These Federal Communications Commission (FCC) subsidized programs are aimed at helping to get more Americans digitally connected.
    • However, partisan divides remain with respect to funneling more money into existing FCC subsidy programs related to broadband and new pilot initiatives. Republicans have favored setting up new pilot initiatives, arguing these could deliver more money quicker and with more flexibility.
  • Rep. Ro Khanna (D-CA) is continuing his calls for an internet fairness doctrine to allow experts to respond to flagged posts. This call comes in direct response to Twitter’s practice of flagging some of President Trump’s tweets.


  • The National Oceanic and Atmospheric Administration (NOAA) warned that it expects a busy hurricane season this year, as the Atlantic hurricane season officially begins today. States across the country, meanwhile, are rewriting their emergency plans to account for the ongoing pandemic.
  • The Federal Aviation Administration (FAA) on Friday granted the National Air Transportation Association’s two requests for extended exemptions for certain crew training and checking requirements. The two letters granting the exemptions are here and here.
  • The Supreme Court ruled against a California church’s challenge that the COVID-19 lockdown orders are putting an unconstitutional burden on religious freedom. Chief Justice John Roberts sided with the court’s liberal Justices in rejecting the request for relief from Governor Gavin Newsom’s most recent directive limiting churches to 25% of their normal capacity.
  • Following the President’s announcements withdrawing from the World Health Organization, suspending entry to the U.S. by Chinese nationals deemed security risks to American scientific research, and scrutinizing Chinese companies listed on U.S. markets, the Chinese Embassy in Washington urged the U.S. to do its part to better manage problems with relations between the two countries. As a reminder, the President also announced that his Administration would start rolling back special preferences for Hong Kong.
  • President Donald Trump announced Saturday he is postponing the G7 summit until September and plans to include Australia, India, Russia and South Korea, who normally do not attend these meetings.
  • President Trump was in Florida yesterday for the successful launch of the SpaceX-NASA mission, which was postponed from earlier last week due to inclement weather. The SpaceX Crew Dragon officially docked at the International Space Station Sunday morning.
  • The Trump Administration officially labeled Antifa as a terrorist organization over the weekend. White House National Security Adviser Robert O’Brien stated over the weekend that Attorney General Barr and the Federal Bureau of Investigation (FBI) are focused on surveilling, disrupting, and taking down Antifa.
  • The U.S. Department of Agriculture (USDA) on Friday lowered its U.S. agricultural exports estimate to $136.5B for fiscal year 2020, down $3B from its February forecast. USDA cut its export forecast to China to $13B, down $1B from its February projection.
  • President Trump’s Executive Order targeting social media companies last week stripped liability protection from companies that censure content. The Executive Order was immediately rebuked by tech companies, industry lobbyists, and free speech advocates. As a reminder, the U.S. Chamber of Commerce condemned President Trump’s Executive Order on Friday. The statement indicated the Chamber’s belief that the order violated principles of public policy.
  • On Friday, the Justice Department said private parties have a right to challenge a merger after it has been completed. Jeld-Wen, one of the country’s biggest manufacturers of doors, is seeking to overturn a court order that would unwind its 2012 merger with rival Craftmaster International and require it to pay $176 million in lost profits to Steves & Sons, a customer who sued over the deal. The case marks the first time a third party has challenged a merger and persuaded a court to unwind the deal after it was consummated.
    • The decision in this case will ultimately matter for large tech companies accused of using acquisitions to become dominant in their respective markets.
  • Federal Register Notices
    • The Small Business Administration (SBA) posted the requirements for loan forgiveness under the Paycheck Protection Program (PPP). The notice can be found here.
    •  SBA also informed borrowers and lenders of SBA’s process for reviewing PPP loan applications and loan forgiveness applications. The notice can be found here.

Other News

  • Latin America is poised to be the next epicenter for the COVID-19 pandemic. The region currently has approximately 920,000 confirmed cases and nearly 50,000 deaths across the region’s 33 countries, but those numbers are rapidly increasing. Mexico saw its largest daily increases in COVID-19 deaths and cases last week and, while recording about 85,000 confirmed cases and around 9,400 deaths, likely has real numbers that are much higher given that Mexico is testing at a relatively low rate compared to many other countries.
    • This could have major impacts on U.S. industries, such as the auto industry, that rely on Mexico as a major part of the supply chain.
  • America’s seaports have seen a steep decrease in cargo since the beginning of the COVID-19 pandemic but have yet to receive direct federal relief. Containerized cargo was down 18% in March and, according to Chris Connor, CEO of the American Association of Port Authorities, will likely be down 20%-25% for April and May. Auto ports were hit especially hard by the closing of Chinese factories and some have seen volumes down by as much as 90%.
  • Southwest Airlines announced Friday that it will allow for empty middle seats on flights through July 31. Though airlines have claimed that leaving these seats open will be detrimental to their business, many in Congress have pushed the carriers to implement these steps to restore traveler confidence in flying.
  • Due to protests in response to the death of George Floyd, areas across the country have mobilized the National Guard to assist law enforcement. In Minnesota, the National Guard’s presence has increased from 700 deployed on Friday to more than 4,100 on patrol. It is expected that number will grow to over 10,000. Though the protests have largely been peaceful, there have been instances of violence that have prompted the deployment of the National Guard.
  • U.S. stocks have made a significant rebound since late March. According to the Wall Street Journal, “Optimism about state and business reopenings and the potential development of a coronavirus vaccine has lifted the S&P 500 36% from its March low, cutting its losses for the year to 5.8%. The index rallied 3% last week to cap its best two-month stretch since 2009. The Stoxx Europe 600, meanwhile, is down 16% in 2020, and Hong Kong’s Hang Seng Index is off 19%.”
    • Investors point to a booming technology sector and an unprecedented amount of stimulus from the Federal Reserve as main reasons for the outperformance.
  • Zoom, the video conferencing platform, is planning to strengthen encryption of video calls hosted by paying clients and institutions such as schools, but not by users of its free consumer accounts.
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